Cole ready to resume AWB hearing

As Commissioner Cole gets ready to resume his hearings into the AWB scandal, the political fall-out is now obvious with diminished support showing up in the polls this week for the Prime Minister.

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MAXINE McKEW: As we go to air tonight, it's a tense time for the Beaconsfield community in Tasmania, as they wait for news of three miners who've been trapped in the town's goldmine since last night. We'll bring you that story shortly. But, first tonight, to a new element in the continuing wheat scandal. As Commissioner Cole gets ready to resume his hearings tomorrow morning, the political fall-out is now obvious with diminished support showing up in the polls this week for the PM. On top of that, AWB lawyers have accused John Howard of possible contempt of the Cole Inquiry by being seen to pre-judge the outcome. And mindful of ongoing concern in Washington, the PM attempted to answer his critics today via an article published in the 'Wall Street Journal' in the US. John Howard again insisted his government was deceived by the AWB, but it looks as if there are yet more questions for the Government. As a result of the 7.30 Report's investigations, we can now reveal the identity of a former Austrade official who is alleged to have been involved in business negotiations between the AWB and the Iraqi front company, Alia. The official's role in this saga begs the question of how the Department of Foreign Affairs and Trade handles its sometimes conflicting obligations to promote Australian trade, while adhering to international rules. Nick Grimm reports.

NICK GRIMM: There have been the familiar faces and those who were not so well-known. Australian's biggest bribery scandal has been all about who knew what and where information went. Now, we can add to the cast a new face. New revelations, too, raising questions about the government body which has so far avoided the glare of the inquiry spotlight. Australia's overseas Trade Commission, Austrade.

MARK VAILE, TRADE MINISTER: Let's just wait to see what the inquiry comes out with in terms of the companies involved. That's why it's been set up.

NICK GRIMM: Mark Vaile has been the minister responsible for Austrade since 1999. Like the Prime Minister, and Foreign Minister who followed him into the witness box two weeks ago, he's laid the blame for the AWB scandal squarely at the feet of the company's executives.

MARK VAILE: I was not too trusting.

REPORTER: Are you embarrassed your staff didn't investigate earlier?

MARK VAILE: No.

REPORTER #2: Are you not at all embarrassed for how long you went on believing AWB, Mr Vaile?

NICK GRIMM: There are those who believe we are yet to hear the full story of the Government's involvement.

ALLAN BEHM, FORMER DIPLOMAT: I think what we are seeing at the moment is ministers who very generously letting their department off the hook.

NICK GRIMM: Tonight the 7:30 Report can reveal fresh evidence about links between the Australian Government and Saddam Hussein's front company, Alia. It focuses on the role of a former Austrade official who the Federal Government touted to Australian companies like the AWB as their middle man in the Middle East. But when the 7:30 Report sought to ask dual Australian-Jordanian national Ayman Ayyash about his alleged links with Alia, he would neither confirm nor deny them.

AYMAN AYYASH, FORMER AUSTRADE OFFICIAL: No, no, and I'm going to end this conversation. I think you are pushing too hard, Nick, and this is not acceptable, OK.

REPORTER: Well, they are very serious claims that have been made...

(Engaged signal sounds)

NICK GRIMM: From 1994 through to early 2003 Ayman Ayyash was the Austrade post manager in Jordan, the most senior official in the country. His alleged involvement in the controversy raises new questions about Austrade itself.

BRUCE HAIGH FORMER AMBASSADOR: An Australian Trade Commissioner in a post like Jordan would have made it or should have made it his business to know about a company like Alia and if he didn't, then he was not carrying out his functions properly.

STEPHEN BARTOS, NATIONAL INSTITUTE FOR GOVERNANCE, UNIVERSITY OF CANBERRA: It's not universal, certainly not what is meant to happen, but there's still a bit of culture there that some of them still are part of whatever it takes school of Government.

NICK GRIMM: Ayman Ayyash's role emerged after the 7:30 Report tracked down the general manager of Alia, Othman al-Absi, seen here during a visit to Australia last year. He said he'd been invited to parties at the Australian ambassador's house and that Alia was known to the staff working at the embassy.

OTHMAN AL ABSI, GENERAL MANAGER ALIA: They invite the famous people and the respected people in Jordan, Iraqi people.

NICK GRIMM: The revelation caused some discomfort for Australia's ambassador to Jordan, John Tilemann, who took the stand at the inquiry the following day and denied any knowledge of Alia.

BRUCE HAIGH: It would be very surprising if staff at the embassy, including the most senior staff, hadn't had contact with people like Alia. It's part of their job and of necessity they must. When you're overseas you have to get to know all of the players in whatever market or whatever political environment you're operating in.

NICK GRIMM: But contact between Alia and Australian Government officials began much earlier than last year. When we spoke to Othman al-Absi he also identified the Australian trade official who said he knew years ago that Alia was owned by Iraq.

OTHMAN AL ABSI: There is an official also, a guy from Austrade. We sit with him on dinner with AWB, um, and so they know us. His name Ayyash, Ayman Ayyash, so...

NICK GRIMM: And he was an Australian Austrade official?

OTHMAN AL ABSI: Yes.

NICK GRIMM: Was he?

OTHMAN AL ABSI: Yes, it was a meeting with dinner with the AWB and me myself as Alia representative for transportation.

NICK GRIMM: Do you think that Australian Austrade Commissioner Ayman Ayyash would have been in any doubt who owned Alia and...

OTHMAN AL ABSI: Yes, he know Alia because he know also our chairman brother Sheikh Hussain al-Khawam and he kept in touch with them so many times.

NICK GRIMM: Now, just let me reiterate. This was before the war in Iraq had taken place. So we're talking about 2003 or earlier?

NICK GRIMM: So who is Ayman Ayyash? Well, he's kept a low-profile. We do know he used to work for the Australian company BHP and is currently employed by West Australian mining company called Gippsland Limited developing projects in the Middle East. He features in the 1998/99 annual report to Federal Parliament where he states there are substantial rewards awaiting Australian companies seeking to trade with Iraq under the Oil-for-Food Program. The 7:30 Report has no evidence that Ayman Ayyash was aware of the kickbacks being paid by the AWB to Iraq but according to Professor Stephen Bartos from the National Institute for Governance at the University of Canberra, the desire to clinch deals leaves some Austrade officials walking a fine line.

STEPHEN BARTOS: There's still a bit of a gap between the work of the trade people in Austrade and the diplomats in the Foreign Affairs part, Foreign Affairs and Trade. That is, even though the two departments merged in 1987, there's still a bit of a cultural difference between them.

NICK GRIMM: Copies of emails between AWB executives and Ayman Ayyash have been presented at the Cole Inquiry, but at the time they seemed unremarkable. Now they offer a fresh insight into the role played by the man who describes himself as Austrade's roving business development manager in Jordan. They show that Ayman Ayyash was actively involved in helping secure wheat contracts for Australia. In one email he reveals the news that AWB has just won a contract to supply 50,000 tonnes of grain to Jordan.

BRUCE HAIGH: Trade Commissioner in a posting like Jordan would be focussing entirely on the major item of trade, which would be wheat. When I say "entirely" he'd be focussing a lot of his time on selling wheat. He'd also be looking for new markets, but he'd be looking to increase the range of his contacts within the community in order to hold that market. He'd be trying to find out where the competition was coming from and he would be putting in place measures to try and meet that competition.

NICK GRIMM: If the claim is true that Ayman Ayyash knew Alia was part owned by Saddam Hussein's Government, what did he do with that information? We put that question to Austrade, which responded by saying that it has no record of any contact between its former official and Alia. Furthermore, Austrade told us that it had been assured by Ayman Ayyash that he did not know of Alia while he was employed by Austrade and that he was not aware of any relationship between Alia and AWB.

STEPHEN BARTOS: Austrade has an obligation to behave ethically and it would fall under that duty to pass the information up the chain. They also have an obligation to comply with Government policies and assuming that the Government doesn't want kickbacks or bribery to occur, obviously that obligation also flows down through to all of the officers employed by Austrade.